U.K. mobile retailer and broadband provider Carphone Warehouse PLC (CPW.LN) said it is increasingly confident of completing a demerger by March 2010 as the company reiterated full year guidance and reported better-than-expected performance in both its businesses.

In the last two years the group has reshaped its business, spinning off its mobile phone retail offering into a joint venture with Best Buy Co. Inc (BBY) and building a fixed line broadband business, TalkTalk, from scratch into the largest residential broadband provider in the U.K., albeit with a leg-up from its recent acquisition of Tiscali U.K.

The company is preparing to demerge Best Buy Europe from TalkTalk and said Thursday it is increasingly confident of completion by the end of March 2010.

Carphone also reiterated its full year guidance for 10% growth in headline earnings per share, excluding one-off items and some amortization associated with its acquisitions, and GBP150 million of free cash flow.

TalkTalk added 77,000 new broadband customers in the second quarter, excluding its recent acquisition of Tiscali U.K., well ahead of company consensus forecasts for 41,000 net new additions.

Still, the company lost 62,000 Tiscali customers in the same period, in line with its expectations, and said after completing the merger it has found that Tiscali had 160,000 fewer customers than previously indicated.

But this would not affect the company's goal of taking its broadband base to between 4.1 million and 4.2 million by the year-end and it would also receive an undisclosed payment for the lower subscriber base.

Meanwhile Best Buy Europe grew its total connections by 2.0% in the period, bringing the total connections for the group to 3.17 million, again ahead of company consensus forecasts for 3.11 million subscribers.

Carphone shares closed Wednesday at 205p.

-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293; kathy.sandler@dowjones.com